Council mulls 'job poaching' agreement

The city of Hilliard is open to joining a multijurisdictional agreement regulating economic incentives, but only if certain other cities agree.

KEVIN CORVO, ThisWeek Community News

The city of Hilliard is open to joining a multijurisdictional agreement regulating economic incentives, but only if certain other cities agree.

An ordinance authorizing Mayor Don Schonhardt to enter into the agreement on behalf of the city was introduced April 23 at the Hilliard City Council meeting.

The ordinance is scheduled for a second reading and a public hearing at 7 p.m. Monday, May 14, at the Hilliard Municipal Building, 3800 Municipal Way.

In December, 10 mayors and city managers of Franklin County cities signed a letter of intent to enter into an agreement concerning economic growth in the central Ohio region and best practices for economic incentives.

The cities were Columbus, Dublin, Gahanna, Grandview Heights, Grove City, Hilliard, New Albany, Upper Arlington, Westerville and Worthington. Hilliard officials said April 23 that the other nine cities must sign the agreement for Hilliard to do so.

Since December, six more municipalities have expressed interest in the agreement. They are Canal Winchester, Obetz, Groveport, Reynoldsburg, Bexley and Whitehall. Hilliard officials left it to the discretion of Schonhardt whether to require their participation.

A formal draft copy of the agreement was created March 15. The agreement is designed to curtail the practice of local corporations changing locations, sometimes multiple times, in central Ohio by use of tax breaks and other economic incentives.

In some instances, cities will approach corporations at a time when previously agreed upon tax breaks are about to expire, a practice some have termed "job poaching."

Critics of the practice say it does little to improve the overall economy because rather than attracting new jobs to central Ohio, existing jobs merely are shuffled to the city offering the best tax break.

But the plan will only work if all the players agree, Hilliard City Council members reiterated at the April 23 meeting of council's economic and entrepreneurial development committee.

Hilliard development director David Meeks said the purpose of the agreement is for member cities to "stop being gamed" by brokers shopping for the best deal.

"We want to send a message that we, as a region, won't be led around anymore," Meeks said. "But everyone has to join for it to work."

Council members were willing to allow the municipalities not perceived as competition to Hilliard to sit out. But if competing cities rejected the agreement, "it would be a deal-breaker," Meeks said.

Of particular concern, Meeks said, is how Westerville and Dublin perceive the agreement. The two cities are considered top competitors for the kinds of jobs Hilliard wants to attract.

The agreement stipulates that member cities will not solicit corporations in other member cities where it is known leases or existing economic agreements are to expire, and that member cities will notify other member cities when a corporate client is seeking incentives to relocate.

The agreement also sets a cap on the amount of incentives cities can offer equal to automatic incentive programs that exist in some central Ohio cities, in essence leveling the playing field between some cities with the ability to offer greater incentives.

Westerville officials have reportedly voiced skepticism, Meeks said.

At a meeting last month, Dublin City Council member Mike Keenan said the agreement amounts to a poker game in which participants agree to show their hands, something he did not consider likely to succeed.

"You show me your (cards) and I'll show you (my cards)… that isn't going to happen," Keenan said.

But Hilliard council members were hopeful an agreement can be reached.

"It's a necessary and noble step," council president Brett Sciotto said. "This regional competition (among local cities) has been hurtful (and) I want it on record that Hilliard is willing to participate in the effort."

Thus far, one of the 16 municipalities considering the agreement has passed legislation to join: Gahanna.

Three cities, Hilliard, Dublin and Columbus, were expected to introduce legislation April 23 concerning the agreement. New Albany is to consider the proposal May 7, Meeks said.

The remaining cities have yet to formally consider the issue, Meeks said.

The agreement regulating economic incentives is separate from the shared-services agreement for fleet maintenance recently signed by Hilliard and eight other local cities – Columbus, Dublin, Gahanna, Grandview Heights, New Albany, Upper Arlington, Westerville and Worthington.